Economics

Robots

How to spend it

CARDIFF GARCIA notes that the last few years have been rough on employment in most job sectors...but not in the education and health services arena, where employment growth has been remarkably strong and steady. Assume for the moment that this isn't simply reflective of varying cyclicality across sectors and that, as he says, "to the extent that any sector has shown immunity to being disrupted by new technology in recent years, it’s education and health". Might this, from Ed Luce, then prove a problem?

The effects of technology are only just beginning to be felt in education and health care—the two most labour-intensive areas of the US economy that both suffer from productivity stagnation. Online education is beginning to spread. It is also meeting resistance. “The reactionaries in the faculties will eventually be grandfathered out,” says Tyler Cowen, co-founder of the Marginal Revolution University, which has pioneered free online learning in economics and other subjects. “We’ll still need Harvard as a dating service,” he jokes. “But the mid-level private universities do not know what is about to hit them.”

Even in health care, which reliably added jobs when every other sector was shedding them, technology is starting to look labour-saving. Last week, the Food and Drug Administration issued a patent to RP-Vita, the first “human interacting autonomous robot” for hospitals. Forget downloading diagnostic apps. At some point we will be boring Watson with our symptoms. For many of us there will be big gains. The most innovative teachers will be able to outsource lessons to the internet and focus on each child’s specific problems. The best doctors will be freed from basic diagnostics to do the same.

But the spread of the robots will leave a large and growing chunk of the U.S. labour force in the lurch. In their excellent primer, "Race Against The Machine", Erik Brynjolfsson and Andrew McAfee point out that in the contest between changing technology and education, the former is winning. Too few Americans are prepared. Some, such as Mr Cowen, fear many never will be. He believes the federal government should pay a basic guaranteed income to all Americans – a despairing view that accepts there will be permanent losers.

Is this a problem? Maybe; such developments in education and health care might make them, to a much greater extent than they are now, superstar industries, in which highly skilled, very talented workers are extraordinarily productive and extraordinarily well paid. Entrepreneurs in online education might conceivably displace thousands of middle-income professors. Developers of quality diagnostic services, or even home health care robots, could earn huge returns will destroying millions of middle-skill jobs. And in one view, that could lead income further concentrated at the top while the ranks of underskilled, underemployed workers explodes—unless educational attainment can turn a large share of the latter group into members of the former group, an unlikely prospect. In that case, Mr Cowen's minimum income might be necessary to prevent the development of a highly unequal economic dystopia.

But an awful lot depends on just how much consumer surplus such innovations produce. Americans spend a lot of money on education and health care. They also spend a lot on other goods and services produced in an economy in which health care and education expense is a significant share of labour costs. What if those costs stopped growing? What if they fell?

Well, in that case it should be cheaper to employ Americans, and Americans should have more disposable income sitting around to spend on other things. And those other things might well be—indeed would basically have to be—labour-intensive, low-productivity goods or services that will help soak up displaced labour. Would those jobs pay wages high enough to attract workers, or to allow for rising real wages? That would depend on where (geographically) and in what sector the demand arises. But on its own, a surge in productivity in big, low-productivity sectors should be a very good thing for society. It's possible for that to translate into underemployment or unemployment, but it is by no means a certainty. Indeed, for most of industrial history "hollowing out" in high productivity sectors has not necessarily translated into a decline in middle-skill jobs overall. The present period might be different (or might continue to be different), but it's impossible to say without knowing what people would spend their extra money (and/or time) on.

A professor is a person who grudgingly gives up some of his/her precious time to teach a class rather than write papers - but only because the university forces them to.
.
That's a gross generalization, I know, but there's an element of truth to it. For many professors, teaching is a distraction from their "real" work. If they lost it, they wouldn't miss it (so long as they still kept their job).

Whenever I hear the lament about millions being put out of work and whatever shall they do, I harken back to a time not so long ago when perhaps 80% of the workforce was down on the farm. Freeing up all that labor from toiling in the fields has resulted in neither mass unemployment nor mass starvation.

Simply because the job someone had before is no longer available does not by definition make them a deprived and useless burden. It gives them the opportunity to do something else. Historically, that "something else" has often been better than what preceded it.

Obviously, any high level research or learning should involve stints working in active research labs. That doesn't need to be structured around a conventional "university". It certainly doesn't have to be structured in an (arbitrary) 4 year degree. Some indicators of the disruptive power of online education:
.
- Online education offers to eradicate conventional lectures (thankfully - they were always a lousy medium of education).
.
- Online education offers to eliminate textbooks and journals (neither of which are ever up-to-date, neither of which offer the quality or breadth of academic coverage available online).
.
- Online education offers to open up long distance collaboration on research or engineering projects (with vast opening of learning opportunities) - just think Google hangouts, Google docs, version control and other such tools.
.
- As laboratory equipment or data sources open up to the internet (i.e. support remote monitoring, operation and experimental/ procedural design), far more active research opportunities will be open regardless of location or status of the participants concerned.
.
- As transparent surveillance/ authentication of personal academic performance, research, study, design, engineering or programming activity becomes available through online tools, bureaucratic accreditation structures will become superfluous.
.
There are many reasons to expect most universities to die in the coming decades (and I look forward to this outcome - they are retarding science and education). Rather, we will move towards a world with much smaller administrative overheads, in which actual researchers have far greater freedom, far higher global mobility and far higher productivity. In all probability, there will be more active research labs & groups than ever before, and those will increasingly be open to younger generations even at earlier stages in their education - in part thanks to the demise of universities.

No kidding. Technology, and efficiency is a good thing. Aside from the fact that money not spent on healthcare or education will go to other things, and obviously increases real incomes across the economy, it also means that it will be easier and cheaper to get healthcare and education.
-
It is amazing how long the incredibly dumb idea that we get more things (economic growth) by making making things as inefficient and difficult as possible. We don't need to make people want to spend money by raising the price of things, people always want things. We live in a world of scarce resources, and unlimited wants, which is why there is always more work to be done.
-
Those are the things that we think to a large degree should be guaranteed, and if the price of those go down, that means the cost of guaranteeing those things, government spending, can decline. Also, these are sectors with higher than average wages, precisely because they are inefficient. A technology that hits sectors previously largely not affected by increases in efficiency means an increase in equality.

My desire to interact with neighbors, orphans, needy, and stray pets would increase immeasurably if said neighbors, orphans, needy, and stray pets were Spandex wearing supermodels in perfect health. Just saying.

There are so many areas in higher education where online lessons are worthless. How many people have chemistry labs (legally) in their homes? Biology labs? Physics labs or telescopes? Pretty much all the natural sciences will still require in person instruction and hands on lab work, especially at the graduate level.
.
I will say one thing - I do not fear the day when machines can do 90%+ of the labor humans do, and we can all sit on our butts drawing a stipend. I wonder how all the "takers & makers" Randiots will deal with humans intentionally making ourselves into "takers" while we allow the machines to be the tireless "makers"....

The point of the article is in effect about what happens if expensive middle skill labour (eg the basic diagnotic role of a doctor or a substantial part of an educator role) is replaced with a robot.
This replacement would not occur unless it saved money hence the logic is sound.
Education has to innovate and move on with the times, including online learning. We cant all learn using stone tablets and chisels like the boomers.

For the Economist this article is slow to make the obvious creative destruction point - jobs were famously lost in weaving from the introduction of the spinning Jenny, in horse jobs by the arrival of the car and much else besides. All these changes have cost jobs but created wealth, which leaves people net better off. It is not just wrong but outrageous to argue that we should somehow support a drone community of those who cannot/will not change! Especially as those about to be affected in health and education are highly educated and intelligent, unlike those affected by past change who were not so helped. Or perhaps Mr Cowen thinks we should also support bankers who might be displaced by automatic trading algorithms?

I think it will be a long time before robots can provide equivalents for human concern, attention and affection. How good will a robot hairdresser be at gossip in the foreseeable future? There are many jobs that require close-up human interaction that robots will not fill soon. Don't forget the Uncanny Valley, where almost-but-not-quite human robots cause revulsion.
-
Perfection in emulating a human being is a long way off.

Well, in that case it should be cheaper to employ Americans, and Americans should have more disposable income sitting around to spend on other things.
.
A 100" 3D-LED TV.
More streaming videos to the 100" TV.
More apps and the latest smart phone every year.
Designer clothes, designer coffee, designer autos, designer...
. And those other things might well be—indeed would basically have to be—labour-intensive, low-productivity goods or services that will help soak up displaced labour.
.
Sure, and Generation Xcess and Yner will drink Folgers and Maxwell House instead of drinking designer coffee made with bottled water.
.
But as Waldorf once said, "A fella can dream."
.
NPWFTL
Regards

What if those costs stopped growing? What if they fell?
.
That would probably mean that supply had outstripped demand.
.
Please explain how costs could fall before going into wishful thinking.
.
If one starts with a false premise...
(something I learned not at an online college.)
.
NPWFTL
Regards

I recall watching an interview of Gates when he was in his early 40's (maybe even late 30's) when his philanthropic career had not begun. He was asked point-blank why he wasn't among the ones who were the great philanthropists. His reply, I thought, was a most candid one. He said, "I am not there yet. But I will be."

I think at a certain level of wealth, you want money so you can give it away. For different people, this level differs. To be in a position to give is the greatest fortune, I think, in life. In a material-focused society, the currency for giving is money. But there are other currencies for giving, so that it is quite an equal opportunity endeavor as well for all. Not everybody is good in making money, but everybody is good in making wealth is some currency, as long as the heart is willing. People who think big give big, but giving is giving - an act of kindness to the needy (not needful) without strings attached. The story was told of the woman (a prostitute? - no time to look it up) who gave a nickle at the entrance of the temple when her entire asset was a dime and a few more usable years left in her bread-earning career. I hope it's all right to post my thought about giving. Sound awful preachy, and, uh...worse, something else. :)

I don't know. I think there are two key aspects to productivity. One is measured in quantity, and the other quality.
.
In education, I cannot imagine having a robot for a mentor. Why? I can't see his/her eyes like mine.
.
In healthcare, a robot doing wound dressing is great, as it eliminates the risk of accidental skin-to-skin contamination and a robot, to my knowledge, has no dandruff. [I recall the time when a farah-fawcett haired nurse did my IV dressing with gloves. Scared me to death. She had long piercing nails too inside the latex gloves] But in diagnostics, accuracy sometimes is as much an art as a science. Sure, scans and blood work can be handled by machines. But as we all already know, prognosis cannot. Yet some doctors are better at it than others. Why? They know the patient as human to human.
.
So even looking at the question addressed by this article requires more than a robot mind.

Sir, when Baxter works at $3 per hour (made by thesame makers of Vita), you reduce the need to offshore to distant countries, and can safely argue that American operators willbe freed to work on more complex tasks.

Testing Methods need to evolve as well as part of online teaching. Critical thinking should be taight and tested in novel ways for example as the internet presents ample opportunity for cheating on traditional methods.
This is a perfectly valid evolution, after all, exams do not really represent working life. In real working life, you can ask your friends / colleagues for hep and look up whatever resources you want in order to produce a report or do some work - new testing methods need to evolve.

True - perhaps then the true value of their research could be measured bearing in mind that they are forced to teach by their institution mainly due to the extra moey it brings in.

This could mean a cull of research staff as in effect tuition fees subsidise research. No bad thing if done properly although I doubt it would be. I can easily imagine the well positioned getting priority over the good researchers.